‘Offshoring’ expert says ‘reshoring’ vital to saving middle class
A push is underway in the Rio Grande Valley to promote Bi-National Economic Development, or BiNED, which aims to develop advanced manufacturing — and the high-paying jobs it brings — on both sides of the border.
Whether it pans out to a significant degree remains to be seen, though a phenomenon known as “reshoring” can’t hurt, especially if there’s enough of it. Reshoring refers to U.S. companies moving manufacturing operations back home after offshoring them, especially to China or Mexico.
Rosemary Coates, executive director of the Reshoring Institute at the University of San Diego, California, on Dec. 1 delivered a presentation on the subject to a full house at the ITEC Center for an event sponsored by the Brownsville Economic Development Council. The presentation was titled “The Urgent Need to Reshore: Why America Must Rebuild Manufacturing Now.”
According to Coates, a supply chain management expert and author of four books, in the 1990s and early 2000s U.S. manufacturers’ economic strategy was based on moving operations to China, either because the competition was doing it or it seemed like “the thing to do.”
At the time, Coates, a veteran global business operations consultant, actually facilitated the process for dozens of companies.
“I was helping companies offshore to China,” she said. “By God, I was helping them.”
Between 2001 and 2007, 2.7 million U.S. manufacturing jobs were lost to offshoring, Coates said. American workers being forced to train their Chinese replacements presented a particularly galling picture, she said. All that offshoring was devastating to communities that lost manufacturing plants, Coates said.
Eventually she started feeling bad about what she did for a living and began focusing on reshoring. Two years ago Coates founded the institute, a collaboration between the University of San Diego and Blue Silk Consulting, a global supply chain firm she heads, to provide research and support to companies interested in bringing manufacturing and services home.
Fifty-four percent of U.S. manufacturers with operations in China and annual sales more than $1 billion are considering reshoring, Coates said. Since 2003, offshoring is down 70 to 80 percent and reshoring up 1,500 percent, while as of 2015 the number of jobs lost to offshoring is roughly equivalent to the number of new U.S. jobs created, she said.
“Reshoring is no longer just an idea,” Coates said.
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